Healthy work culture equals healthy profits

It took a $50,000 company loss over one weekend of failed processing for a former
OneSteel
superintendent to realise the importance of a healthy work culture and engaging staff.

Speaking at a recent Human Synergistics conference in Sydney, George Fonua warned that businesses were wasting investments in tools and technology if they aggressively managed staff.

“When I first started out I was all about business improvement – I was very process-, very systems-oriented," he said.

The 70 or so people under Mr Fonua’s command when he joined OneSteel in 2000, to fix a division plagued by high costs, were “absolutely scared" of him, he said. He was pretty good at performance-managing people out.

He now says, “karma is a bastard". When staff refused to work an extra half hour – with penalty rates – one Friday afternoon to process steel that would otherwise be scrapped at a cost of $50,000, Mr Fonua warned that “someone would pay".

He spent the weekend poring through contracts for a clause to “nail" someone but a question posed by his wife triggered his change of heart: “Why don’t you make them want to stay?"

“While I was bombarding those people about control and having systems in place, I had sucked the life out of them," he said. “There was so much more I hadn’t tapped into – hearts and minds stuff."

On the following Monday, rather than sacking staff he brought them together for a conversation about what had happened. His section went on to reach a 30 per cent growth goal in a year.

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“With relatively low costs you can get some substantial, very quick changes in your performance," he said.

Mr Fonua left OneSteel this year and has started LocoMotive Consulting, advising companies like Rio Tinto, Origin Energy and OneSteel Recycling on switching from an aggressive to a constructive, trust-based culture.

“We spend most of our time on tangible things like hardware," he said. “Culture is software – the fluffy stuff.

“If we don’t get the software right, your hardware will never expand to its full ability."

One way to unlock potential was by giving staff the courage to speak up about operations, he said.

Macquarie University academic Paul Gollan said although giving employees a voice made them happier, whether it improved performance was conditional on a number of factors.

“To fully utilise the capacity you have, there need to be a lot of systems in place that give directions on the sort of behaviour you want," he said. Professor Gollan, who is researching the impact of employee participation, said performance management, development and the alignment of values were also key.

“You need to be able to set very clear expectations," he said. “From that you will get discretionary effort. That really is the gravy train – where you get productivity."